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I learned the words “entrepreneurship” and “startup” on a rainy Amsterdam weekend in October 2014.  It was the year I went to the Netherlands to study “International Business Innovation” – a combination of terms that I couldn’t really explain, but sounded very cool to me. With an inherited “excellent student syndrome” from the Moldovan school system and a newly developed need to prove myself in this foreign land, I was saying yes to all kinds of student initiatives and extracurricular projects. So, I found myself in a Lean Startup Weekend – a three day event where aspiring entrepreneurs form teams and go from idea to tested prototype. 

My student colleague and I were the youngest at the event and probably the most naive – we just had the silly mission to make people happy while all the rest were working on real things like banking or insurance platforms. Looking back, I think most of the participants felt we were completely out of place and we most likely were – I, for one, was too ashamed to ask what a startup even was. Nevertheless I went with the flow. Meeting all those professionals tired of their corporate jobs and wanting to do their own thing was a real inspiration to me and I suddenly felt drawn to that world. And so my 4 years of university were intertwined with countless startup meetups, entrepreneurial and self-help books, digital marketing and SEO articles, and small scale entrepreneurial ventures of my own.

And Amsterdam was the perfect place for my ambition – a city known to be a tech hub and a host to one of the most startup friendly communities.

There was a certain charm to the startup culture, one that I could identify with. Young professionals, students and fresh grads seemed to rebel against the rigid structures of the corporate world. 

In the startup world, everyone seemed to be on a level playing field with no hierarchies and formalities. It seemed like no one cared about your background as long as you showed the drive and energy to give it 110%. The hustle, the energy, the drive, the crowded calendars and late nights were fascinating to me only a few years back. 

I worked with startups, for startups and co-founded one myself. My officially registered startup lasted for a full 8 months, but that wasn’t a reason for getting upset. After all, everything was a trial and error and those 8 months were an incredible learning experience. 

But today, this world does not excite me anymore.

The hype around tech entrepreneurs and startups… the fancy Friday bars, hipster company culture and confident founders who can convince you to change the world with them obscure the reality of ego power games, and an economic system that will always prioritize profit making machines.

One could of course argue that it is slowly changing. We have social entrepreneurs and impact investors who deeply care about making a positive change, but even social entrepreneurial initiatives are put under the scrutiny of the capitalist market rules. The rationale of our current economic system is: if you are not making a profit, or if you are not attracting more customers, then what are you doing?!

The Silicon Valley “success stories” of Google, Facebook, Apple and other giants alike – built on the shoulders of publicly funded research – have created unreal founder expectations, but also established the principles and values governing the startup world everywhere else on the planet. Growth and efficiency have become the name of the game and investors are pumping money into the ideas promising to become the next unicorn or industry disruptor. It is worth, however, to stop and wonder what goes behind spectacular growth and increased efficiency. A closer look may reveal years of tax evasion, lobbying, suffocating competition, offshore labor exploitation, and an inhumane work ethic. 

During the COVID-19 pandemic for instance, delivery startups are celebrating their increased orders and revenues, while the courier drivers – the people without whom there would not be a startup to start with – are fighting for basic protection benefits. 

“Do you know what torture it is to go hungry while I am carrying your food on my back?” asked Brazilian driver Paulo Galo on his Social Media. 

According to ILO, workers lost 3.7 trillion dollars while, Oxfam reports, the world’s billionaires gained another 3.9 trillion since the pandemic started. It is quite clear that there has been a transfer of wealth from ordinary people to the ultra rich. 

These are problems long boiling behind the scenes of the shiny startup world. The current pandemic only sheds more light on the aggravating conditions. Instances like these led me to question more and more what is the “success” I was admiring so much in startups and founders, what is the cost of this success and can we really be insensitive to all the problems arising as a result of “increased efficiency” and “more growth”? Can we really sip our Friday bar cocktail and tell ourselves we have nothing to do with these problems? Can we really believe that what we have is due to our hard work and talent, that we deserve our “startup success” and that the millions finding themselves living precarious lives deserve that too?

I lost my enthusiasm with entrepreneurship and technology not because I am anti-tech or anti-startups. My frustration comes from the way tech and startups are governed and from how they are inclined to jump to solutionism. 

A governance structure inherently undemocratic and unequal

The startup world, like the rest of the economy, is run undemocratically. The open company culture where the CEO sits across the newly hired intern creates a very appealing illusion of a flat hierarchy. Everything becomes even more alluring after a teambuilding weekend where everyone got wasted and has an unlimited supply of “hey, do you remember when Dave almost fell off the boat?” type of jokes or when there is unlimited supply of coffee, lunch and snacks. This familiarity makes working after hours or over the weekend suddenly acceptable. However, having an open company culture where everyone treats each other as equals does not exclude an unequal economic structure. 

There is inequality between founders and shareholders, between founders and employees, between blue collar and white collar workers across the supply chain, to name a few. Everybody seems to talk about worker rights and “serving humanity” like Tim Cook, the CEO of Apple said in his 2017 MIT address, but reality just does not reflect that. 

Jenny Chan, Assistant Professor of Sociology at the Hong Kong Polytechnic University tells Dissent Magazine in an interview that “the most progressive thing about Apple is its public relations work”. Her research into Foxconn, the largest contract electronics manufacturer in the world, reveals shocking evidence of worker maltreatment and misery. The long 12 hour shifts, the loneliness and desperation, the “safety nets” outside the factory windows installed to prevent any potential suicide attempts, the always increasing productivity quotas – all so that a new gadget can be delivered to the customer on time. Apple’s expensive products do not reflect fair pay and fair conditions for workers. Around 60% of the market price for an iPhone goes into Apple’s pockets; Chinese workers on the assembly line get 1.8% of the gross profit. 

In May 2019, UBER’s upcoming IPO (Initial Public Offering) provoked a protest outside its headquarters. Valued at that time at around $ 100 billion, it meant that the founders and shareholders would get a few billions while the drivers – almost 4 million of them – would share only 3% of that. And it is these drivers, the representatives of the gig economy without an employment status, no social benefits, pension or health insurance that made it possible for UBER to become a unicorn. UBER might attract talent in its office and offer exciting perks, but it does not seem to have the same concern for all the drivers who sleep in their cars to be able to make up a living wage.   

Warehouse workers at Amazon keep sharing horrifying testimonials of working conditions, and they are still not allowed to unionize – it seems like what workers want does not count for anything. Democratic decision making has no place on the factory floor. If Amazon sets the performance metric of scanning an item every 11 seconds, that’s what workers need to do. If they should skip bathroom breaks to achieve that, so be it. What is the next step from here? When companies have to top their performance metrics and revenues year after year, workers’ wellbeing and health is sacrificed so that the company and its CEO can increase their valuation. Robots might replace workers, but that only means that workers are yet again in a very vulnerable position, potentially having to accept jobs that are even more precarious and uncertain.

All these examples testify that what most workers want and need does not necessarily align with the company and shareholder goals. Not only that, but workers don’t really have a democratic platform to discuss and vote on certain aspects of their work nor the direction that the company is taking. In the entrepreneurial world and in the economy as a whole, the rationale relies on the logic of cost-benefit and within this logic moving production to a country with cheap labor and looser regulations makes sense even if it means thousands of people will suffer as a result of it.    

Solutionism 

Evgeny Morozov, a Belarus-born technology writer, coined the term “technological solutionism” to define the transition from solving complex problems in public health, education, law enforcement through political means to outsourcing them to algorithms and tech technocrats. 

Since the tech startup world puts so much emphasis on efficiency and optimization, it creates the impression that given the right framing and the right algorithm, any problem can have a computable solution. The slow, bureaucratic, messy political sphere juxtaposed with the speed of change and continuous roll out of new gadgets in the tech realm nudges us to favor tech over politics. This obsession with efficiency and solutionism closes down other avenues for problem solving and leads to a path where algorithms, rather than elected governments, are shaping our future. 

What is worrying, is that it might become easier and cheaper to invite tech giants into roles of power and decision making – roles that should stay political and be elected democratically. For instance, just at the beginning of this year Twitter, Facebook and Youtube banned ex US president Donald Trump from their platforms. Putting aside all the spreading of hate speech and misinformation by Trump, the question is: should private corporations have the power to become arbitrators of what is right or wrong for democracy? Are they really fit to be our moral compass? Ex-president Trump was firing up hate speech many years before the ban, so why was he banned only now? And why are other political leaders not getting the same treatment? Modi, the Prime-Minister of India has been advocating for violence against Muslims for a very long time, yet Facebook does not see that as a problem. And the simple explanation for that is that Modi is one of the most followed people on Facebook, therefore he is too important for Facebook’s business model to be silenced. 

Hate speech is a big problem, but it shouldn’t be regulated by private corporations. It should be addressed by the public through a public organization who can monitor such things. 

Outsourcing such problems to tech startups or corporations comes with its own imperatives – users need to be monetized, data needs to be gathered, subscriptions need to be sold. 

That also means that a lot of responsibility shifts to the citizen, instead of the industry. It’s the user that needs to track exercise and food intake, it’s the user that needs to track energy consumption, it’s the user that needs to buy more sustainably – why don’t we regulate the food, energy and retail sectors to start with? This optimization of our behavior is only trying to improve the situation within the existing constraints instead of challenging these constraints in the first place. 

What needs to change?

Entrepreneurship, technology and innovation are amazing. I am not arguing against them. I am arguing against how they are currently governed. I am worried about the framework and constraints within which entrepreneurs have to operate. When profit, efficiency, and growth remain the key elements of the entrepreneurial paradigm, even the best intentioned entrepreneurs will be redirected towards the solutionist path. Currently, capital is directed in only a few high return industries. For instance people don’t get involved in education or health, unless it’s an edtech or health tech startup that can show a massive user growth or increased revenues. 

But some problems require a more holistic approach and some solutions take a longer time to implement. And some strategies require even taking a step back instead of two jumps forward. 

And we also need a more democratic way of organizing the economy as a whole, so that capital is not concentrated in only a few hands, but redirected where it’s needed the most. 

If we want true development and progress, we can’t just prioritize initiatives that would bring impact and profit in the least amount of time. For future generations to thrive in a clean environment, for future generations to enjoy democracy and a good quality of life, we can’t just choose solutions that would bring the most benefits to the current generation. We need to start re-thinking what we truly value in our society and transform entrepreneurship and the economy as a whole with those values at core.  

Catalina Catana hopped countries every few years, playing entrepreneurship in various corners of the world while growing a silent passion for social sciences and progressive economics. A few years in the private sector were enough to convince her to change her direction. She is researching and writes about global issues related to development, inequality, and social justice.